Amazon losses, bezos spent money in what place?

“total revenue rose 22%, a net loss of $7 million.”

amazon Q2 earnings – 2013

in the second quarter of this year, amazon for the Wall Street made a is not too bad. Compared to a net loss of 7 million and was “dwarfed”. The 7 million orders of magnitude and amazon seem to be very decree by destiny, only this time last year, the number represents not losses, but net income.

although amazon’s total revenue to maintain the momentum of steady growth, but profits are presented capacity decline. We can not help but ask, bezos spent money in what place?

a, where is the money spent on the amazon?

1. Acquisition: Goodreads and Liquavista

according to incomplete statistics, in the second quarter of this year amazon were conducted two large-scale acquisitions. The two were acquired company is Goodreads and Liquavista respectively.

at the end of march, amazon announced the acquisition of social reading Goodreads website. Although both sides did not disclose the specific purchase details, but the personage inside course of study analysis for amazon need to pay at least $150 million. Goodreads company was founded in 2007, a total of $2.75 million. By the end of the last August, members of the site has exceeded 10 million, with various types of 360 million copies of books. As a social reading website, Goodreads’s main function is to use recommended bibliographic, head of the household members and between members can share information and reading evaluation (a bit similar to douban).

then in May this year, amazon proudly announced acquisition of samsung electronics, a subsidiary of Liquavista. The company is famous for its production of colour display products such as low energy consumption. LiquavistaColor and LiquavistaVivid technology for electronic reader devices such as provide the most suitable display mode. Though the acquisition of digital has always not been exposed, but analysts from bloomberg, the acquisition, spend at least $100 million to the amazon.

we is not hard to find, the two big acquisitions, amazon is one of the original the strengthening of the e-book market, the other is for its hardware, such as electronic readers, add technical advantage. Two pen both acquisitions, although the strategy, improve the amazon can also let the giant paid high fees.

2. New product development: smart phones, set-top box

in April 2013, according to the bloomberg businessweek, amazon or is launching a set-top box equipment. Although box market has presented white-hot competition, but amazon still think there is a lot of user market is not apple, Microsoft, Google and other companies equipment occupation.

may, according to the Wall Street journal reported that amazon is secretly developing two smartphones. One of the mobile phone will use tracking technology of retina, to provide users with a 3 d without glasses auxiliary equipment such as screen visual experience. In addition, the report also pointed out that the amazon from long ago set out to build their own smartphone devices. Some time ago, the company also hired former executives of Microsoft WP department Charles Kent (Charlie kindle).

as electricity, amazon does not have in the field of smart phones and set-top boxes and other technical advantages. Therefore, the above two kinds of new equipment research and development and promotion will let bezos pay large sums of cash cow. However, with the advent of the era of mobile, user’s habit of using the Internet, great changes have taken place. Mobile terminal field layout as soon as possible, for the amazon, is a wise choice.

3. Market development: fresh logistics

in June 2013, according to Reuters, Amazon is expanding Seattle Amazon Fresh transport flight range. The second half of this year, will be extended to Los Angeles and San Francisco. Predicts 2014, amazon’s transport flight “territory” will be extended to other 20 countries.

, industry analysis, in the amazon, may make the food industry becomes complicated tangle. The grocery industry is saturated, “blood” for cutting price competition has intensified. Amazon deployment in the industry, it is very could only “monkey take a place”. Although knowing that will “burn money”, can hold the amazon “deep pockets”, “east wall down to” also can yet be regarded as a kind of offensive strategy. But the analysts pointed out that the practice will be very bad influence on the food industry, the prospects are grim.

4. Technology investment: amazon’s cloud services (AWS)

according to the New York times reported, in the second quarter of this year, amazon in science, technology and content of total spending as much as $1.59 billion, up 47% on a year-over-year basis, accounted for nearly 10% of the total revenue. Including amazon’s cloud services (AWS), the Internet technology became the focus of bezos.

compared with retail business, AWS account for a small proportion in the amazon business, but is growing fast. Last year, according to amazon Q3 earnings, according to the “other” business revenue grew 59% year-on-year, the media and merchandising revenue growth was only 26%. Analysts estimate that AWS in the amazon “other” occupies a considerable proportion of revenue. As mobile intelligent terminal to become mainstream, cloud technology has been more and more. Amazon’s cloud services maintained a leading position in the same competition. Bezos choice to further consolidate and strengthen the cloud, is understandable.

2, bezos “calculus” : amazon transformation

as the world’s largest e-commerce sites, amazon is fame and fortune. However, backed by sufficient cash milk and huge user community of amazon, but never relax vigilance. In the face of strange and changeful mobile Internet market, bezos has for years been in the transformation of thinking about how to smooth the implementation of the company.

1. The business model transformation – “terminal + service”

as one of the world famous electric company, in the amazon in the same market occupies the absolute advantage. Recently, however, amazon is obvious to the “terminal + service” “apple” business model transformation. Bezos proudly said: “we are very happy to see that amazon’s Kindle series products, and we have established the digital content of ecological system, broadly welcomed by the users. I found on amazon sales top ten products in the first quarter, both for the Kindle series equipment and related digital content products.”

since apple AppStore release in 2007, the entire Internet industry rules of the game changed dramatically. “Terminal + service” new business model, for apple instead of Microsoft, has become the world’s most valuable technology company. Although amazon and apple to take the same business model, but it took a contrary development path. Apple is to use the service (application) binding terminal, rich application in AppStore in order to attract consumers, to buy its exclusive mobile devices. The amazon is different, the price of its Kindle is a kind of product is far less than apple’s products. The purpose of the amazon to sell equipment, however, is to let the consumer to buy all kinds of content and application in the app store.

2. The business structure transformation – cloud as the center, scattershot

amazon since founded its business orientation had three great changes.

the first time from the beginning of the creation in 1995, when the amazon’s slogan is to become “the world’s largest bookstore”. After years of struggle, amazon has created the online and offline, network and the traditional print books of each link, became the world’s largest suppliers (paper) books.

second shift from 1997 to 1997, amazon is committed to be the largest integrated network retailers. After a foothold in the e-book market, bezos and not give up to expand territory, and since launch its music store in 1998, amazon through category expansion and international expansion, to continuously expand their business scope. Amazon has now become the world’s leading e-commerce sites.

the third from 2002 to now, amazon web services (AWS) and Kindle launch marks the electricity giant and a major transformation.

except for the enterprise and developer with a variety of cloud-based services, amazon will also start your existing services and the integration of the cloud. Whether it is stored in the cloud of streaming video or 3 d map application based on cloud data, the cloud is becoming amazon’s various business infrastructure. In the future, amazon will form the AWS as the center, common prosperity and development of multiple business situation.

the Kindle is amazon “equipment + service” another masterpiece, the birth of the same period with the iPhone, not only is an e-book reader, the Kindle Store behind the ebook Store to the user distribution of electronic books, and later the Kindle Fire tablet (revision with Android) and the amazon Appstore to expand the amazon’s content distribution to more video, application field. Amazon’s e-book sales volume has transcended the traditional book sales, in the field of ebook distribution, amazon’s market is not only a range (only 200 markets around the world) or market share is second to none.